Jason Charest v. Citi Investment Group Corporation ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
JASON CHAREST, UNPUBLISHED
May 18, 2017
Plaintiff-Appellant,
v No. 330775
Oakland Circuit Court
CITI INVESTMENT GROUP CORP., LC No. 2014-143971-NZ
Defendant-Appellee,
and
RYAN SNOEK and EMRE URALLI,
Defendants.
Before: BECKERING, P.J., and MARKEY and SHAPIRO, JJ.
SHAPIRO, J. (concurring).
I concur in the result reached by the majority opinion but write separately for two
reasons.
First, but for the September 17, 2014 order extinguishing plaintiff’s right of redemption, I
would conclude that plaintiff is entitled to a trial on his claims even though the relevant funds
were returned to him. Given the return of the funds, plaintiff’s only extant claims rests on the
assertion that had he received the funds sooner he could have redeemed the property. However,
all the relevant events took place after the September 17, 2014 order that extinguished the
remaining redemption period. Plaintiff’s claim to the overbid funds was not filed until
November 6, 2014, so even if he had received those funds immediately, he could not have used
them to redeem the property. Accordingly, the trial court correctly dismissed his claims for
abuse of process and intentional infliction of emotional distress.
Second, I write to note the improper and possibly unlawful conduct of defendant. Put
simply, defendant attempted to wrongfully obtain the $76,000 in surplus funds; funds to which it
had no lawful claim and funds which obviously and unquestionably belonged to plaintiff.
Defendant’s written claim to those funds lacked even a colorable basis and was procedurally
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defective. I can discern no possible reason for defendant’s actions except to obtain funds that did
not belong to it with the hope that plaintiff would not understand the process and would fail to
object.1 When plaintiff did file a claim to the funds, the sheriff’s department did not release
them to plaintiff because defendant objected. Plaintiff asked defendant to withdraw its objection,
but defendant refused. It was only after plaintiff filed suit and defendant retained outside counsel
that defendant withdrew its claim and objection.
MCL 600.3252 governs how overbid proceeds from a sheriff’s sale are to be treated.
Where foreclosed property is purchased at such a sale for an amount greater than the amount
needed to satisfy the mortgage and fees on which the property was sold, the statute provides a
clear procedure by which the subject funds will be disbursed. It states:
[T]he surplus shall be paid over by officer . . . on demand, to the mortgagor, his
legal representative or assigns, unless at the time of the sale, or before the surplus
shall be so paid over, some claimant or claimants, shall file with the person so
making the sale a claim or claims, in writing, duly verified by the oath of the
claimant, his agent, or attorney that the claimant has a subsequent mortgage or
lien encumbering the real estate, or some part thereof, and stating the amount
thereof unpaid, setting forth the facts and nature of the same . . . . [MCL
600.3252.]
The statute makes clear that claims to a surplus can only be made by the foreclosed party
or someone having an unpaid mortgage or lien on the property. Additionally, claims are not
permitted to be filed without an affidavit so stating in order to assure that avaricious individuals
or entities who have no interest in the property cannot file false claims in hopes that the proper
recipient will fail to do so and that they will receive a windfall of the surplus funds. In other
words, the disbursement of surplus funds from a sheriff’s sale are to be distributed only to parties
who have a right to it; the disbursement of these funds is not a lottery in which those having no
right to the funds may claim them, hoping that the lawful owner remains silent.
In this case, defendant successfully bid $270,116.20 for the property, which resulted in a
surplus of $76,000. It then sent the sheriff a document it termed a “notice of claim” for the
$76,000 despite the fact that it had neither a secondary mortgage nor lien on the property. The
“claim” submitted by defendant to the sheriff contained no affidavit and no reference to a right to
the property. The pertinent part of the September 24, 2014 letter reads simply, “Citi Investment
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I respectfully disagree with the majority’s conclusion that plaintiff offered only “speculation”
and “conjecture” to support his allegation that defendant’s demand for the surplus funds was
done with an improper motive. A plaintiff can prove a defendant’s state of mind or motive
through the use of circumstantial evidence. See Smith v Anonymous Joint Enterprise, 487 Mich
102, 116; 793 NW 2d 533 (2010) (stating that a plaintiff can prove a defendant’s state of mind
through circumstantial evidence to satisfy the “actual malice” requirement in a defamation case).
Defendant’s actions in filing a demand for surplus funds to which it had no conceivable right
when raising such a demand could frustrate the plaintiff’s rights to defendant’s advantage could
be considered circumstantial evidence of an improper motive.
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Group is making a claim for the overbid funds, and objects to any disbursement of overbid funds
until ordered by the court.” Defendant’s “notice of claim” failed to state that it “has a subsequent
mortgage or lien encumbering the real estate, or some part thereof” failed to state “the amount
[of that mortgage or lien] unpaid,” and failed to “[set] forth the facts and nature of [the
subsequent mortgage or lien].”
This begs the question, why was this claim filed, and why did defendant refuse to
withdraw it upon request? Defendant has not provided an answer to this question, and given our
ruling in this case it need not do so in this forum. However, defendant’s filing of a false claim is
no small matter. Defendant is not an unsophisticated party who might take such action without
knowledge of the law. It appears to be a large financial entity whose primary business is in the
buying and selling of foreclosed property, and it is reasonable to presume that it is well aware of
the statutes that govern its business. Accordingly, defendant’s actions in claiming the surplus
funds should be reviewed by the relevant state agency, which should determine whether this was
a one-time error or whether it represents defendant’s practice, and if the latter, whether
administrative action is in order.
Finally, it also seems clear that the office of the Oakland County Sheriff’s Department
does not understand its responsibilities under MCL 600.3252. That department should have
rejected defendant’s claim given its complete failure to comply with either the substantive or
procedural requirements of the statute. It is respectfully suggested that that department review
its procedures as to surplus funds.
/s/ Douglas B. Shapiro
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